Europe Slaps Apple with Antitrust Charges Over Spotify

Regulators from the European Union charged Apple on Friday, April 30, 2021, with preliminary antitrust charges following complaints about the tech giant imposing higher rates and fees on the distribution of music streaming applications, reports Tech Crunch.

After the European regulator issued the statement of objections last week, Tech Crunch notes that the tech giant will be given a total of 12 weeks to respond to the antitrust charges.

In its statement of objections, the European Union regulator alleges that Apple is abusing its power in the field of music streaming services distribution by raising the fees levied on competing music streaming app developers who wish to use the App Store, making it a clear violation of market competition rules.

Europe Slaps Apple with Antitrust Charges

In a press conference last Friday, CNBC states that head of competition of policy in the European Union Margrethe Vestager said, “Our preliminary finding is that Apple exercises considerable market power in the distribution of music streaming apps to owners of Apple devices. On that market, Apple has a monopoly.”

Vestager’s statement on the matter is backed with the European Commission findings, saying they “take issue with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their via Apple’s App Store.”

“The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities,” continued the statement.

The antitrust investigation conducted by the EU regulator started last 2020, said CNBC, after Spotify complained over the tech giant’s existing licensing agreements in 2019.

In its complaint, the music streaming giant alleges Apple of imposing an in-app purchase system, allowing the tech giant to gain monetary benefit from the subscription fees, reports Bloomberg.

In the press conference, Vestager continued to say that Apple’s licensing agreements make it a “gatekeeper” for music streaming apps, saying “By setting strict rules on the App store that disadvantage competing music streaming choices and distorts competition.”

According to Vestager, this stems from Apple imposing high fees on in-app transactions for music streaming services in competition with its own Apple music and by preventing users from being informed about alternatives that might cater to their preferences.

The charges imposed by Apple for its own service come up to €9.99, notes Tech Crunch. Meanwhile, the news site reveals that for its competitors in the field, individuals are charged with a higher rate of €12.99. A separate 30% fee is also given to third-party music streaming apps if they wish to sell their own subscription-based services.

In response to the preliminary antitrust charges, Spotify founder Daniel Ek took to Twitter to air his sentiments, saying that “we are one step closer to creating a level playing field, which is so important for the entire ecosystem of European developers.”